France is the second largest economy in Europe and imports an essential part of its GDP. It therefore also is an important market for foreign companies who want to sell their goods and services.
Major France imports
- Machinery and Equipment
- Crude Oil
Who are France’s top import partners? (percentage of total imports)
- Germany (14.5%)
- Italy (7.9%)
- Spain (7.1%)
- Belgium (10.2%)
- UK (5.3%)
- China (5.1%)
- Netherlands (8.3%)
What do we know about French consumers?
The people of France are 65 million in number, spread over 643,801 square kms. 80.71% of this population live in the urbanised areas of Paris, Lyon, Marseille-Aix-en-Provence, Lille, Nice-Cannes, and Toulouse.
Income distribution among French households is represented by their Gini Index of 32, in which ‘0’ means perfect distribution and ‘100’ means complete inequality of wealth. The lowest earning 10% of French households share 3.2% of the country’s wealth while the highest earning 10% share 25.8% of it.
The average income in France is $31,247 a year, higher than the OECD average of $33,604. High average income is correlated with urban migration. Every year an estimated 1.1% of its population migrates to urban areas.
What are the Customs and tariffs regulations in France?
As a member of the European Union, the European Common Commerce policy is applied in France.
For the import of goods, less than 1000 kg in weight or 1,000 EUR in value, one is only required to declare the package verbally at customs and produce the purchase invoice for the item being imported. Hence if you are carrying a sample item, on your first visit to France, you need not undergo any formalities.
However for goods of greater value or size, the system being used by France for import of products is one prescribed by the World Customs Organisation and is known as the ICS. Within this system, the importer is required to declare the Entry Summary to the French customs. It is then passed here before being it is introduced into the European Union Territory Customs. Companies or businessmen from outside the EU need to have an Economic Operator Registration and Identification number as it will be required when lodging a customs declaration.
Like many other countries, import duties in France are based on cost, insurance and freight. It also depends on which part of the world you are importing from. On an average, manufactured goods are charged a tariff rate of 5% to 17%.
The Standard VAT is 20%. Special VAT rates of 10%, 5.5% and 2.1% are applicable for some special categories.
What is the distribution structure in France?
The standard distribution route in France involves goods being sent to wholesalers who in turn utilise various channels to reach retail outlets, where they are made available to the consumer. All wholesalers and their warehouses are situated in a convenient, centrally located area for prompt supply. Local shops and other retailers naturally purchase in bulk from the warehouses to make it more cost effective.
Knowledge of the customer base, major gateways, legal matters as well as the distribution structure will be beneficial to your expansion. Having a local partner will help you navigate around the French market and ensure optimal results for your strategies.
How to find a good business partner?
Paris as the capital of France is also the center for commerce. Most major organisations have their headquarters in or around Paris. For services and industrial products this can be a good place to start with quite some coverage. From there you can approach second tier and smaller cities.
Finding an agent or distributor requires good knowledge of the French language and a good understanding of the culture. If you are not French yourself (and preferably living in Paris with the right educational background) it will be difficult to get access to the market.
Alliance experts can find your business partners within 6 to 8 weeks
Alliance experts helps companies with entering new markets profitably. To be active successfully in France, you need to be around Paris, have the right background and network connections. Our Paris-based specialist can find you the right agents or distributors.
We have a clear and structured approach to find the best partner
We first want to know what kind of partner you are looking for. Based on your information, we make a long-list of 15-20 potential partners that fit your description. After your approval we find the right decision maker, approach him or her personally and share your business profile with them. This mostly leads to 3-5 companies who are suitable as your partner and interested in working with you. Once we have found these companies, we plan your meetings and accompany you during the first visits.